Valero Energy Corporation

Valero Energy has built a sizeable cash cushion, strengthening its capacity to reward shareholders while retaining flexibility through commodity cycles. As of June 30, 2026, Valero held $7.9 billion in cash and cash equivalents, well above its long-term $4-$5 billion target. In the first half of 2026, VLO returned $3.6 billion to stockholders through buybacks and dividends, up from $1.3 billion in the same period of 2025, with second-quarter returns alone totaling $2.6 billion. The surplus cash leaves share repurchases as an important avenue for additional capital returns, especially since management sees no immediate pressure to reduce leverage further. The board added a new $5 billion buyback authorization in July 2026 on top of $1.42 billion remaining under its February program, and the quarterly dividend rose to $1.20 per share from $1.13 a year earlier. Cash flow will also benefit from the $230 million St. Charles FCC optimization project, boosting high-value gasoline output, while improved crude purchasing economics and expected insurance coverage for Port Arthur repair spending are expected to protect cash generation. Peers Marathon Petroleum and HF Sinclair are also boosting shareholder returns, with MPC returning over $2.8 billion in the second quarter and DINO returning $265 million while raising its dividend by 5% to 52.5 cents per share.

US refining stocks are rallying at full speed, with Marathon Petroleum and Valero Energy both more than doubling in value since the start of 2026, driven by an unusually sharp surge in global refining margins as disruptions have reduced capacity and tightened fuel supplies. The two refiners delivered combined profits of around $8.8 billion in the second quarter of 2026, topping Wall Street expectations, and a Barron's report suggests more upside remains. Marathon, the largest US refiner by volume, doubled its refining margins in the second quarter, helping drive an almost four-fold increase in profits, while Valero benefits from an arbitrage opportunity for jet fuel exports to Europe. Both companies are also expected to repurchase about 20% of their market value between Q3 and the end of next year, according to TD Cowen's Jason Gabelman. However, a major risk is that investors may be assuming the exceptionally strong margins will persist, as crack spreads could normalize quickly if supplies recover, and both stocks have already surged over 110% since the beginning of 2026.

U.S. ethanol blending credit prices plunged Monday to their lowest levels in more than four months after the Environmental Protection Agency extended a September 1 compliance deadline for refiners and ruled on long-pending small refinery exemption requests by the end of August. Conventional ethanol RINs traded as low as $1.75, down $0.34 from Friday and their lowest level since April 15, according to data from Argus Media, after the credits had traded as high as $2.50 on July 7. RIN prices lost substantial value again during Monday's session in response to the EPA's impending small refinery exemption decisions, after falling 5% on Friday. Market participants expect the EPA's rulings to free up a significant number of credits, with refining and ethanol industry analysts estimating that the exemptions could free up 1.2 billion to 1.8 billion RINs that small refiners could use to meet their 2025 compliance obligations, after the EPA had previously indicated it could reallocate 990 million RINs associated with exemptions. Extending the compliance deadline is seen as signaling some form of RIN relief for refiners' 2026 and 2027 obligations as well, University of Illinois agricultural economist Scott Irwin told Reuters.

Valero Energy expects refining conditions to remain favorable, supported by low global fuel inventories, tight refining capacity and steady transportation-fuel demand. Management noted that roughly 5 million barrels per day of global refining capacity was offline, while light-product inventories were about 130 million barrels below normal seasonal levels. Even if current conflicts ended immediately, consultant data cited by Valero suggested that global inventories could remain below the five-year average through 2027, supporting continued demand for refined-product exports. Valero operates 14 refineries with roughly 3 million barrels per day of combined throughput capacity and sells products across several international markets. Management highlighted strong gasoline export demand from Latin America, while reduced gasoline flows from Europe into the United States have further tightened the market. Valero has an open arbitrage opportunity to export jet fuel to Europe, giving the company another avenue to capitalize on regional fuel shortages. These export opportunities are already supporting Valero's refining economics, with management stating that strong export markets and export premiums helped improve Gulf Coast capture rates in second quarter of 2026. Valero's refining margin reached $6.34 billion in second-quarter 2026, compared with $3.28 billion a year earlier, reflecting the strength of the current refining environment. Marathon Petroleum noted that global gasoline and diesel supplies remain constrained, with refinery outages in Russia and the Middle East adding further pressure to already low inventories. To respond to these conditions, Marathon Petroleum is focusing production on products where demand is strongest. The company reported record distillate exports in the second quarter of 2026, supported by attractive export opportunities in Latin America and Europe. Marathon Petroleum is expanding its refining capabilities through a 90,000-barrel-per-day distillate hydrotreater at Galveston Bay and a Garyville project designed to add 10,000 barrels per day of export-premium gasoline output by the end of 2027. Phillips 66 highlighted increasingly tight global refining fundamentals, driven by low fuel inventories and significant refinery disruptions across Asia, the Middle East and Russia. To capitalize on these conditions, the company maintained 96% refinery utilization in second quarter of 2026 while leveraging its commercial and logistics network to move feedstocks and refined products toward higher-value markets. Its expanded marine fleet and logistics flexibility further strengthen its ability to respond to regional shortages and capture attractive margins. Valero shares have risen 143% over the past year compared with the industry's 84.5% growth. From a valuation standpoint, Valero trades at a trailing 12-month enterprise-value-to-EBITDA of 7.1 times, above the broader industry average of 5.66 times. The Zacks Consensus Estimate for Valero's 2026 earnings has remained constant over the past seven days. Valero currently sports a Zacks Rank number 1, Strong Buy.

Valero Energy reported a record second quarter profit amid a global energy crunch and refined product supply constraints. The renewable diesel segment returned to profitability, supported by tight fuel markets and strong refining margins. Management highlighted the impact of supply constraints on refinery utilization and product pricing across U.S. refiners. The company has completed US$8.42 billion of buybacks and dividend growth, and holds $5.3 billion of available liquidity.

U.S. refiners are posting record profits as global fuel shortages deepen, with Marathon Petroleum, Valero Energy, and Phillips 66 among the biggest winners of the second-quarter earnings season. Marathon Petroleum, America's largest refiner, earned $5.14 billion in the second quarter, more than quadruple the $1.2 billion it made a year earlier, while diluted EPS jumped to $17.73 and revenue reached $52.34 billion. Valero Energy posted a record second-quarter profit of $3.7 billion, with adjusted earnings surging from $2.28 to $12.54 per share, and Phillips 66 saw second-quarter adjusted earnings jump nearly 300% year-over-year to $9.41 per share. Shares of Marathon Petroleum have gained 122.2% year-to-date, Valero Energy 113.3%, and Phillips 66 85.3%, far outpacing the S&P 500 Energy sector's 36% gain. Chevron also delivered its best quarter in six years with adjusted earnings of $12 billion, or $6.06 per share, while Bloom Energy's second-quarter revenue surged 167% year-over-year to a record $1.07 billion on demand from AI data centers.

Valero Energy reported sharply higher sales and net income for the second quarter and first half of 2026, while completing a share repurchase program totaling 48,114,319 shares for about US$8.42 billion. The company's latest earnings release showed strong year-over-year growth, reinforcing its ability to generate substantial cash from its refining and renewable fuels platform. Management highlighted the completion of the buyback as part of its focus on returning cash to shareholders, though regulatory risks around RIN and California LCFS rules remain key swing factors for profitability. The company's narrative projects $112.7 billion revenue and $4.7 billion earnings by 2029, implying a 1.5% yearly revenue decline but an earnings increase of about $0.5 billion from $4.2 billion today.

The massive buildout of AI data centers is creating distinct investment opportunities across semiconductor equipment, real estate, energy, and cooling, according to experts interviewed by Fortune. Hyperscalers are projected to spend between $750 billion and $800 billion annually, with some forecasts reaching $1 trillion, representing 2.5% to 3% of U.S. GDP. In chips, B. Riley Securities analyst Craig Ellis recommends shifting focus from giants like Nvidia to equipment suppliers such as Applied Materials, Lam Research, and Marvell Technology, citing severe undersupply that will drive multi-year capex growth. For real estate, CenterSquare’s Patrick Wilson highlights data center REITs Equinix and Digital Realty as beneficiaries of the shift from AI training to inference, which favors urban facilities with low latency. Morningstar’s Andrew Bischof points to utilities like American Electric Power, which plans $78 billion in infrastructure investment through 2030, while New Constructs’ David Trainer sees value in traditional energy stocks such as Valero and HF Sinclair. In cooling, Morningstar’s Nick Lieb favors Vertiv for its dominant position in precision cooling, though notes concentration risk, and Eaton for its diversified exposure to the electrical grid. Some analysts warn that current spending levels may be unsustainable, with hyperscalers increasingly relying on debt and equity issuance.

Yuanta Securities estimates that Tipco Asphalt Public Company Limited, or TASCO, has a high chance of resuming crude oil imports from Venezuela, which will lift gross margins and drive normalized profit in 2027 up 23.8% to 1.9 billion baht. This follows PDVSA, Venezuela's state oil company, restarting direct crude sales contracts with former customers. Reports indicate Phillips 66 and Reliance Industries resumed purchases in May 2026, while TASCO and Valero Energy are expected to place orders in the coming months. Venezuelan crude has an asphalt yield as high as about 70%, compared with around 50% from other sources, significantly improving cost and production efficiency. The analyst therefore raised the 2027 normalized profit forecast by 18.9% and set a new target price of 19.40 baht, based on a price-to-earnings ratio of 15.8 times, while maintaining a buy recommendation. A 2026 dividend of 1.00 baht per share is forecast, representing a yield of 6.5%.

Second-quarter 2025 earnings for US refiners stood out on surging refining margins. Valero Energy posted a net profit of 3.7 billion US dollars, a more than fivefold increase. HF Sinclair reported net profit of 892 million US dollars, up nearly four times, while PBF Energy swung to a net profit of 915 million US dollars from a net loss a year earlier. Phillips 66 and Marathon Petroleum are also expected to report strong results. For Thai refiners, although they too benefit from refining margins, each company's performance will differ, depending on refinery configuration, crude oil quality, production efficiency, price risk management, and inventory gains or losses in each period. In addition, refiners must shoulder rising hidden costs, such as crude oil premiums, freight rates, and higher insurance premiums driven by Middle East risk, which could add as much as 3 to 6 baht per litre. They also face risks from oil inventory losses, higher financing costs from increased working capital, pressure from government and social measures, and the need to invest in the clean energy transition under Net Zero targets and ESG standards. Key listed Thai companies with core oil refining operations include Thai Oil Public Company Limited, or TOP, Bangchak Corporation Public Company Limited, or BCP, Star Petroleum Refining Public Company Limited, or SPRC, and IRPC Public Company Limited, or IRPC, while PTT Global Chemical Public Company Limited, or PTTGC, has a refining business as part of its integrated structure.

Valero Energy Corp announced a total dividend of $1.2 per share, with the ex-dividend date set for 2026-07-31 and payment on 2026-08-31. The company has maintained a consistent dividend payment record since 1997 and has increased its dividend each year since 2010, earning the status of a dividend achiever. As of today, the 12-month trailing dividend yield is 1.48% and the forward yield is 1.54%, though the yield is near a 10-year low and underperforms over 82% of global competitors in the Oil & Gas industry. The dividend payout ratio stands at 0.33, indicating a conservative distribution policy, while profitability and growth ranks are both 8 out of 10 according to GuruFocus. However, recent three-year revenue and EPS growth rates have declined by approximately 3.80% and 28.60% per year on average, respectively, raising some caution about the pace of future dividend increases.

Valero Energy Corporation outlined a $2 billion capital investment plan for 2026, with approximately $1.7 billion allocated to sustaining the business and the remainder directed toward growth projects. Repairs to the Port Arthur DHT unit are expected to be completed and the unit returned to service by year-end, with total repair costs estimated at $250 million, a substantial portion of which is expected to be covered by insurance. The company reported second-quarter net income of $3.7 billion, or $12.62 per share, driven by strong performance across its refining, renewable diesel, and ethanol segments. Refining throughput volumes averaged 3 million barrels per day, while the renewable diesel segment posted operating income of $717 million and the ethanol segment reported $318 million. Shareholder cash returns totaled $2.6 billion in the quarter, resulting in a payout ratio of 59%, and the debt-to-capitalization ratio, net of cash, stood at 11% as of June 30, 2026.

Zacks Equity Research identifies Delek US Holdings, PBF Energy, and Valero Energy as well-positioned to benefit from tight fuel supplies and steady transportation demand. The Zacks Oil and Gas - Refining & Marketing industry ranks in the top 8% of 247 Zacks industries, with aggregate 2026 earnings estimates up 102.8% over the past year. The industry has gained 60.9% in the past year, outperforming the broader sector's 26.9% rise and the S&P 500's 18.7% gain, and trades at an EV/EBITDA of 6.25X versus the S&P 500's 18.24X. Delek US Holdings carries a Zacks Rank #1 (Strong Buy) with a 2026 earnings growth estimate of 25.9% and shares up 174.3% in a year. PBF Energy, also a Zacks Rank #1, has an expected three-to-five-year EPS growth rate of 56% and shares up 147.6% in a year. Valero Energy, a Zacks Rank #2 (Buy) with a market capitalization of more than $90 billion, has a 2026 EPS growth estimate of 243.6% and shares up 114.4% in a year.

U.S. energy shares rose in premarket trading on Thursday after Houthi attacks on two Saudi oil tankers pushed Brent crude briefly to $100 a barrel, intensifying Middle East tensions and heightening concerns over global oil supply disruptions. Brent crude futures rose as much as 6.3% to $100 per barrel for the first time since May 26, while U.S. West Texas Intermediate crude was up 5.2% at $91.30 per barrel. Shares of Exxon Mobil and Chevron rose 1.6% and 1.7%, respectively, and Diamondback Energy, Devon Energy, ConocoPhillips, and Occidental Petroleum were up between 2% and 2.5%. Refiners Valero Energy, Marathon Petroleum, and Phillips 66 also gained between 2.1% and 2.6%. UBS analyst Giovanni Staunovo said the production recovery process in the Middle East is expected to be slower than the market anticipates, keeping the oil market tight and prices supported.

Global refiners are cutting out commodity traders and buying Venezuelan crude directly from state-run PDVSA, eroding the temporary monopoly held by Vitol and Trafigura. Phillips 66 and India's Reliance Industries have already signed direct supply agreements, with Valero and Thailand's Tipco expected to follow. The shift comes after the U.S. Treasury issued special licenses to Vitol and Trafigura until June 2027, allowing them to move more than 100 million barrels over six months while others were locked out. PDVSA is restoring its pre-2019 model of direct contracts, raising its realized prices by avoiding reseller premiums. Backed by U.S. regulatory clearance, Venezuela's total oil and fuel exports climbed past 1.2 million barrels per day in mid-2026, up from an average of 847,000 bpd in 2025, and are now eyeing 1.37 million bpd by year-end.

Valero Energy shares rose 1.18% to $313.31 in the latest close, outperforming the S&P 500's 0.19% decline. The oil refiner has surged 31.04% over the past month, far exceeding the Oils-Energy sector's 3.6% gain and the S&P 500's 0.55% advance. The company is scheduled to report earnings on July 30, 2026, with consensus estimates calling for earnings per share of $9.81 on revenue of $35.95 billion, representing year-over-year growth of 330.26% and 20.26%, respectively. Full-year Zacks Consensus Estimates project earnings of $32.61 per share and revenue of $135.14 billion, up 207.35% and 10.15% from the prior year. Valero Energy currently holds a Zacks Rank of 2, or Buy, and trades at a forward price-to-earnings ratio of 9.5, in line with the Oil and Gas - Refining and Marketing industry average.

U.S. refiner margins shattered records this week as low stockpiles and supply disruptions from escalating U.S.-Iran attacks threaten fuel shortfalls. The 3-2-1 crack spread, a key profitability benchmark, settled at a record $69.66 per barrel on Nymex Thursday. Diesel has been the main driver, with disruptions to Middle Eastern exports and a temporary Russian export ban tightening an already-strained market, while gasoline supplies are also a growing concern as refiners shift yields toward diesel and jet fuel. U.S. diesel inventories are down nearly 11 million barrels and gasoline inventories down more than 42 million barrels from pre-war levels, and both are well below their five-year seasonal averages. National average retail gasoline prices reached $3.99 per gallon on Saturday, up nearly $0.84 from a year ago, and analysts warn that depleted inventories and damaged Middle East refineries will keep prices elevated, benefiting refiners whose shares have surged this year.

Valero Energy Corporation's board has declared a regular quarterly cash dividend of $1.20 per share on its common stock. The dividend will be payable on August 31, 2026, to stockholders of record as of the close of business on July 31, 2026.

Energy investors face two opposing shocks: Iran's renewed closure of the Strait of Hormuz has pushed Brent crude above $86, while rising bond yields signal a hawkish Federal Reserve unlikely to cut rates soon. Five companies stand out as able to benefit from the crude surge without relying on cheap credit. ExxonMobil holds a 13 percent net-debt-to-capital ratio and $8.4 billion in cash, with upstream earnings of $5.7 billion driven by record Guyana output. EOG Resources is completely unhedged, giving shareholders full exposure to oil gains, and targets debt below one times EBITDA at $45 oil, ending the first quarter with $3.8 billion in cash. Valero is capitalizing on record refining margins, with second-quarter Gulf Coast indicators near $30 a barrel, and recently issued $850 million in notes to clear near-term maturities. Cheniere Energy, the largest U.S. LNG exporter, saw first-quarter adjusted EBITDA rise 25 percent as Gulf gas disruptions boost demand, though it carries higher leverage from terminal construction. Texas Pacific Land carries zero debt and $248 million in cash, collecting royalties across 881,000 surface acres in the Permian Basin, and posted record first-quarter revenue of $237 million.

Marathon Petroleum, Valero, and HF Sinclair each gained over 80% in 2026, far outpacing the S&P 500's 11% gain, as the WTI 3-2-1 crack spread hit $59 per barrel and nearly tripled since January. The crack spread, which measures the gross margin from turning three barrels of crude into two of gasoline and one of distillate, has widened because gasoline and diesel prices remain elevated due to a global refining capacity shortage, the Iran War, Ukrainian attacks on Russian refineries, and lower fuel exports, even as crude prices pulled back after a U.S.-Iran truce. Phillips 66 also climbed over 54%, benefiting from the same tailwind. Falling crude prices do not automatically hurt refiners and can actually boost profitability if refined products stay expensive, though Reuters noted that today's extraordinary margins could prove temporary as crude markets rebalance.

U.S. stocks settled lower on Monday as a sell-off in South Korean chipmakers weighed on technology shares and crude oil prices surged amid renewed U.S.-Iran hostilities. The S&P 500 fell 0.79%, the Dow Jones Industrial Average lost 0.26%, and the Nasdaq 100 dropped 1.88%. South Korea's Kospi Index tumbled more than 8% after SK Hynix and Samsung Electronics plunged over 10% on concerns the artificial intelligence boom has become overextended. WTI crude oil soared more than 9% to a three-and-a-half-week high after the U.S. launched fresh missile attacks against Iran over the weekend, and Iran retaliated with strikes on targets in Jordan, Bahrain, Kuwait, and Qatar while also attacking two vessels near the Strait of Hormuz. President Trump later said the U.S. is reinstating the Iranian blockade and stopping Iranian ships from using the strait, demanding a 20% fee on all cargo for U.S. protection. Fed Governor Christopher Waller added to the pressure by saying the FOMC may need to tighten monetary policy if core inflation remains elevated. Software stocks rallied, with Atlassian up more than 8% and Intuit up over 5%, while energy producers gained as Phillips 66 and Valero Energy rose more than 5%.

Several stocks made significant moves in midday trading. Braiin surged 62% after launching Aria, an AI agent for the real estate industry, with its CEO citing a scalable software opportunity in a market forecast to reach $32 billion by 2033. AppLovin tumbled 12%, making it the worst-performing S&P 500 member and on pace for its sixth daily loss in seven sessions. Biogen added nearly 2% after Truist upgraded the stock to buy from hold, citing potential upside from upcoming drug trial data. U.S.-listed shares of Nio rose 3% after Goldman Sachs upgraded the stock to buy from neutral, setting a $7 price target that implies 46% upside. SpaceX fell nearly 4% to a fresh post-IPO low, approaching its $135 offering price, despite the FAA clearing the way for a flight test. U.S.-listed shares of SK Hynix tumbled 8% after their Nasdaq debut, while Seoul-listed shares sank more than 15% in their worst day ever. Memory and chip stocks were under pressure, with the Roundhill Memory ETF down 9% and the iShares Semiconductor ETF off 4%. MGM Resorts International rose more than 1% after reports of private buyout talks with Barry Diller. Energy stocks gained as oil prices rose over 4% following President Trump's reinstatement of a blockade on Iranian ships, with Valero Energy up 4% and ConocoPhillips up nearly 3%. Shopify and Deckers Outdoor Group both rose about 2% after Jefferies upgraded them to buy.

Valero Energy is well-positioned to benefit from elevated refining margins and strong fuel demand, supported by constrained global refining capacity and tightening product flows. The 3-2-1 crack spread, a key indicator of refining profitability, has risen significantly since the start of the Middle East conflict and remains elevated. Management highlighted a sharp increase in export demand, especially for jet fuel and distillates, which has contributed to declining U.S. product inventories. Valero's strategically located Gulf Coast refining system and extensive logistics network position it to capture increased export volumes while capitalizing on resilient domestic demand. Low product inventories in key markets are expected to support refining fundamentals and keep margins steady.

Valero Energy may be positioned to extend its earnings-beat streak in its upcoming report, according to Zacks Investment Research. The oil refiner has beaten estimates in its last two quarters, with an average surprise of 28.05%. For the most recent quarter, it reported earnings of $4.22 per share versus a consensus estimate of $3.07, a surprise of 37.46%. The company currently holds a Zacks Rank #3 (Hold) and a positive Earnings ESP of +12.93%, a combination that historically produces a positive surprise nearly 70% of the time. Its next earnings report is expected on July 30, 2026.

Brent crude has fallen more than 20% in the past month to around $72 a barrel as the Strait of Hormuz partially reopens under a fragile U.S.-Iran truce, creating a mixed outlook for energy stocks. ExxonMobil faces a slow recovery with damaged Qatari LNG trains that could take up to five years to repair, though its Permian and Guyana output helped it beat first-quarter estimates. Halliburton trades at $34, well below Citi's $52 target, as Middle East drilling activity remains depressed but its crews are positioned for a rebound. Frontline, the world's largest VLCC operator, saw record profits from war-driven tanker chaos but now faces downgrades as rates normalize. Valero hit an all-time high near $259 on strong refining margins, while KBR is a speculative bet on regional reconstruction, with shares down roughly a third over the past year to around $32.

Valero Energy Corporation maintains a debt-to-capitalization ratio of 29.9%, notably below the industry average of 37.3%, which reduces financing risk and positions the company to better navigate weak refining margins or economic uncertainty. This conservative leverage profile enables greater flexibility in funding growth projects, pursuing acquisitions, and returning capital to shareholders. Valero operates 14 refineries with a combined throughput capacity of approximately 3 million barrels per day. Shares have gained 92.9% over the past year, outpacing the industry's 38.2% growth, and the stock trades at a trailing 12-month EV/EBITDA ratio of 7.88X, above the industry average of 5.37X. The Zacks Consensus Estimate for 2026 earnings has remained unchanged over the past seven days, and Valero currently carries a Zacks Rank of 3, or Hold.

US oil refiners are poised to benefit from historically high crack spreads, which remain more than 100% above year-ago levels as global fuel stockpiles dwindle and demand shifts toward American operators. Valero Energy, Marathon Petroleum, and Phillips 66 are each generating robust cash flow that supports aggressive share buybacks and dividends. Valero reported first-quarter 2026 earnings per share more than 30 percentage points above consensus, with $1.3 billion in cash flow and a 5% reduction in share count. Marathon Petroleum's adjusted EPS more than doubled the consensus forecast, while its trailing 12-month buybacks averaged a 5.7% reduction in shares outstanding. Phillips 66 offers a group-leading dividend yield of approximately 3%, and analysts tracked by MarketBeat rate all three stocks as Moderate Buys with rising price targets.

Oil prices are expected to remain high, supporting energy sector profits and capital returns including dividends and share buybacks. WTI crude pulled back sharply from 2026 highs but found support above $75 in mid-June, suggesting the market is not yet pricing a full return to normal supply. Energy sector earnings estimates have more than doubled over the trailing 90 days, forecasting over 120% EPS growth in the current quarter and 65% for the year. ExxonMobil, ConocoPhillips, and Valero Energy are highlighted as stocks to watch, with analysts collectively rating them Moderate Buys and consensus price targets implying modest double-digit upside.

Valero Energy stands to benefit from declining crude oil prices as input costs fall and refining margins widen. West Texas Intermediate crude has dropped to around $75 per barrel from over $100 a month ago, driven by an interim U.S.-Iran deal expected to reopen the Strait of Hormuz and increase global oil supply. Global refining capacity remains constrained while fuel demand for gasoline, diesel, and jet fuel stays resilient, supporting strong margins for refiners. Valero shares have risen 72% over the past year, and the company carries a Zacks Rank of 2, or Buy, with upward earnings estimate revisions for 2026. Other refiners such as Marathon Petroleum and Phillips 66 are also well positioned to gain from the same trends.

Valero Energy shares have rallied 47.4% over the past six months, outperforming Kinder Morgan's 18.3% gain, and the refiner now trades at a trailing EV/EBITDA of 7.25 times versus Kinder Morgan's 13.96 times. Valero benefits from wider heavy crude discounts and the flexibility to shift product yields toward higher-margin fuels, while global refining capacity remains constrained. Kinder Morgan offers stable, contracted cash flows and is positioned to capture rising natural gas demand from LNG exports and power generation, with a $10.1 billion project backlog. Both stocks carry a Zacks Rank of 2, or Buy, but Valero's more attractive valuation makes it the better current choice according to Zacks Investment Research.